A recent study estimates that 47% of foreclosed properties are still occupied.
Foreclosure sounds like the end of the line, but actual evictions can take months some times years depending on the state you live in.
Contrary to popular belief, banks aren’t in the business of owning or taking your home.
A bank repossessed home is called real estate owned (REO), a term used in the United States to describe a property owned by a lender or a government agency.
Lenders or banks are in the business to loan people money not to take their homes. But when they have to foreclose on a house, the bank is forced to own the home until they’re able to sell it to get all or most of their money back.
Not sure how the foreclosure process works in Houston, read this article.
The general understanding is when a foreclosed house goes vacant in Houston, there is a much greater chance that the house will fall into disrepair. Often times the bank would rather have you in the property even after you stop paying your payments and the foreclosure is started because it wards of vandals and keeps the house in good working order.
That creates a win-win situation. The homeowner gets an extended opportunity to resolve the issue and the lender in most cases, gets the home back in working order.
If you follow the media which most of us do, there is always talk about people living for free after foreclosures – and even many stories about banks “abandoning” properties affecting home values.
In many of those stories you find homeowners living for months if not years for free.
That’s a dream come true, we all get to live for free and spend all day on a beach.
We all wish it was that easy, right?
Back to Reality.
No bank would purposely neglect to collect payments. The only way that you get to live without making any payments is when some major mistakes were made or some oversite the lender isn’t aware of.
However, when the lender does figure it out, you will be held liable for many fees that were incurred during that time.
But you might get lucky! It’s possible, and it’s happened before. However, it’s not exactly legal to avoid payments that you owe, and it can get you in serious trouble.
Besides, ethically that is the wrong thing to do. If you were a lender would you want someone doing that to you?
Not all lenders are major institutions backed by the Federal Housing Administration (FHA). Some are small lenders using their retirement plans to fund their investments.
So why are so many foreclosed homes occupied? Vacant homes are targets for vandalism, crime, and a negative impact on home values.
Staying in the property can help the bank maintain the value of their investment, so it’s actually in their best interests to keep it occupied. Partly because of the ways that the foreclosure laws are structured in TX, banks may ask you to leave while wanting you to stay.
There are a few perfectly legal ways to remain in your home, even after foreclosure.
How To Stay In My Home After Foreclosure In Houston
Not all these options are available (depending on your situation and your lenders), and you’ll need some expert advice along the way to help you get through. Expert advice means a lawyer that understands and knows the governing laws in Texas.
1) Wait it out. Honestly, this is a pretty bad option, but it seems to be increasingly common. You definitely shouldn’t run away and abandon your house when the first notice of default shows up. Remember that the proceedings and the process takes months and sometimes years. It’s not over until it’s over, so don’t give up too early. On the other hand, don’t wait until the sheriff shows up to evict you to start packing up your stuff.
The last thing you need is to be put out of the house with nowhere to go with all your belongings sitting in the front yard. We have seen it before many times, it’s not a pretty sight and especially people with children. Always take action to get the issue resolved. A great option is to sell your house fast to Sell Your Homes Houston.
2) Go to court. In very rare cases, judges are granting stays and delaying evictions. This is really only a valid option if you (and your attorneys) can prove that the bank has neglected a legal requirement during the foreclosure process. During the past few years, a lot of fraudulent behavior at banks has been uncovered – so we may see an increasing trend of using the courts to stop foreclosure. Fighting a bank with a lawyer is very difficult, expensive, and time-consuming, even if you have the right case (most people will lose in court).
3) Propose a move-out bonus. Often buyers of occupied foreclosure properties spend thousands of dollars on lawyers and other costs of eviction, so why not save everyone the time and expense by taking some of that money yourself? It’s known as “Cash for Keys”.
Cash for Keys is a negotiated amount for you to vacant the premises between you and the lender. It sounds a little greedy, but greasing the wheels does help everything to run smoothly. Plus, you can help out the bank and the buyers by not abandoning the house to squatters before they’re ready to take possession.
4) Rent it back. It may sound crazy, but some banks are willing to take on previous homeowners as tenants in their property. That’s only a short-term fix, as they’ll want your agreement to vacate the premises as soon as they find someone to purchase the property. In some cases, we can even purchase the property and rent it back to you.
It’s really good that you’re reading this page and exploring your options. We help homeowners like you to find creative solutions.
We can’t help everyone, but we might be able to help you.
We buy local Houston TX houses like yours from people who need to sell fast.s